Gift from Dad - now he wants it back?

[cashquestions]

I've namechanged for this - obvious reasons really - but just need to know what people think.

I'm late 40s, two teen boys. Mum died four years ago and shortly after my Dad, very generously and unexpectedly gave us a sum of money that he said was my mum passing money down to us. It was properly documented as a gift for IHT purposes etc and I've invested it and put it in pensions etc. It's mostly tied up for the long term so that my kids can go to uni debt free.

I am very grateful.

Now my dad has married again. I'm delighted. But he wants to buy a new home with new wife, and he's asked me to 'lend' him a third of the money he gave me to help him get this 'over the line'. He reckons this will be short term while she sells her property - wants my money for three months. But there's no guarantee of course that it will be.

I could SCRAPE together what he wants. It would mean losing ISA allowances, selling investment at a loss etc. of course, if he needed an op or something drastic I would do it. But this is so he can sell a nice home that was my family home and buy something pricier in a 'more upmarket' bit of a very nice village.

I'm sad he's asked. It makes me feel like the money he gave wasn't really a gift, and that he's always wanted control over how it was used.

Should I lend him it? What will happen to our relationship if I don't? Am I unreasonable to resent him asking?

I wouldn't, OP. Who knows how long it will take his fiance to sell her home. Better to put both houses on the market and live in the one that takes longest to sell.
I'd say really sorry Dad, but the money is all tied up and can't be released at short notice.

Lending something to someone you trust for seemingly a short period of time is not prioritising anyone.

I missed that some of the money is in pensions so yes that money is effectively spent. I'm still of the same mindset though IF I had the money and it was a loan. I wholly trust my father but appreciate some people don't have that relations with their parents

But it doesn't stop you asking your brother if he's willing to loan your dad the money he needs. If your db is wealthy he probably doesn't mind especially as it is a loan. He just needs to get the proper paperwork in place so that if something happens to your dad before he's repaid the loan then he will be reimbursed from his estate. Might seem callous but it avoids any potential future disputes.

Are they getting finance for the purchase? If so you will have to say any money 'loaned' is actually a gift, so no guarantee of getting it back

This is difficult because he helped you out and now he’s asking you to help him out for a short period. So if you say no, it will damage the relationship. I would help him. I don’t see it as he is trying to control the gift or ask for it back he’s Simply asked to borrow money for a few months,

If you invested 4 years ago, you won’t be ‘selling at a loss’ you should be a minimum of 40% up, the previous 4 years have been exceptionally good to most investors, assuming a globally diversified portfolio.

I agree. I wouldn’t be giving it to him.

I would say it’s all tidied up or that it’s been spent/ put into your mortgage.

In fact it will probably turn out this is your Mum giving you the money. If he has remarried and especially as he’s now sinking all his money into a house with his new wife, if she outlives him his whole estate will likely go to her. So it’s a good job he did give you some money when he did!

@BorgQueen I still don't reckon this would be the best time to sell it, however!

Honestly I would say that you dearly wish you could help, but you put it in trust funds for the kids/the pension and none of it is accessible now.

I think people also doubt the dad will end up paying the Op back

What has he done about rewriting his will?

@sittingonabeach I asked before he remarried that he ensure he redoes it - as he wasn't aware that old will become null on marriage. I didn't how he decided or what it says as that is not my place, but he assures us he has rewritten it (and has told us where it is). As I say, I don't think anyone is trying to do anything underhand at all. It is useful to hear all these perspectives, thanks

I’d lend if it were just him, but I think it muddies the waters now he has a second wife

Don't get yourself entangled in someone's else's financial affairs.

Your Dad is not going to be upset with you, he just asked if you could lend it as he thought it might be possible. Get back to him and suggest that he gets a bridging loan instead.

He's obviously lying about the 3 months because the house isn't even under offer yet.

Don't get sucked in, just decline. You will feel better after you've told him.

If I gave my kids a gift, my circumstances changed and I needed a bridging loan, I'd like to think they'd help me out. If they didn't, well, I would be inclined to be less generous in the future.

Nope, it's yours (and your kids) tell him it's tied up tight.
You may never see it again. A friend's divorced and remarried father left everything to his 2nd wife and her children. My friend and her brother got nothing.

If your brother is so wealthy, couldn’t he lend your dad this money? I agree it must be really disappointing that he’s done this.

@OneNewLeader I am also thinking hard about that. I don't want him to think I'm not grateful. At all! I am, I promise - but also mindful of my responsibilities towards my own kids and how hard it would make the next year for us if I didn't have that cash available.

It is awkward because it was your mums money at one point so it going to a new home with a new partner adds a strange element.

is the most honest answer ‘we’d struggle to get this sum together as have spent it on university and mortgage’

you never know he might take it in his stride

Does you father know what you did with the money, OP? Someone said what would happen if you'd paid your mortgage off with it, so couldn't get it back, which is a valid question I think. Obviously you may very well not want to lie to your father, but ...

On the other hand, he's clearly not in the first flush of youth and would the new house prove to be more suitable for him as he ages? Lending the money now, with suitable protection in place, might be the lesser of the evils in the long run.

You don't need to make up a story that the funds are tied up because they really are. You've made wise investments and dipping into pension money and ISAs has serious tax implications that would harm your finances. When you get the money back you will still be worse off.

If there's another house with equity then a mortgage lender will accept a charge against that to increase the size of the new mortgage. That could be paid down when the other house sells. It's an obvious way to access additional funds and it would be a red flag if it can't be done that way.

While I'd agree people shouldn't ask for gifts back, to me, asking for a loan is different. I loaned money to a relative who had always looked after me as a kid-he couldn't get normal loans due to his own credit issues, so if I hadn't helped him, he'd have been stuck.
It's more complicated if you can't easily get the money (in my case, it was a thousand I had in a normal account). And it depends-is this a one-off dream house? One in an area that is hard to find, or a particularly good deal? If not, I'd explain to him, and let them find another.

I’d be very hurt to be asked this in your position and it would probably be quite damaging for the relationship. He’d jeopardise your children’s security and your feelings about him for the sake of giving his new wife a better house than the two she can already live in? Fuck that.

@cashquestions

It is entirely up to you and - if you don't lend the 1/3rd "might" affect your relationship.

If you do decide to lend then please, please get a legal document drawn up showing that it is a loan with time-scale and conditions.

There is a [rebuttable] presumption that deals [contracts] between family members are not enforceable. Long long ago we were given some money by DGM as a gift. Later claimed as a "loan". We had had a solicitor draw up an agreement that it was a gift but never got it signed.

No end of strife!

He's your father. He helped you out now it's your turn to help him out. Between you and your brother you could lend him the money surely.